What Are Policy Limits?
Oregon auto insurance policies include a menu of coverages. Some are mandatory, and must be included in every policy. Required coverages also include required coverage amounts. Other coverages, or the amounts of coverage, are optional.
A "policy limit" is the maximum amount of certain kind of coverage in an auto policy. In this article, we focus on the policy limits for liability coverage and uninsured/underinsured motorist coverage.
Oregon and Washington auto insurers protect drivers who make mistakes, and cause others injury. That is what the insurance contract is all about. This is the "liability coverage." However, when someone buys an auto policy, they are buying a certain level or amount of coverage. Oregon requires no more than $25,000.00 in liability coverage. This has not changed in decades, and in a serious injury claim will often not even cover medical expenses. Oregon motorists can, and often do purchase higher levels of coverage, sometimes up to $250,000.00.
The problem with liability policy limits arises with a serious injury claim. Insurers are required to protect their insureds from "excess liability." Excess liability occurs when an injured person takes a claim to court, and recovers a verdict or judgment that exceeds the amount of the liability policy limits. When this happens, the at fault driver is personally responsible for any amount of the judgment exceeding their policy limits. Insurers have a legal responsibility to avoid this from happening, and will make a policy limits offer to protect their insured from excess liability. Unless the careless driver has significant assets, we will advise our client to accept the policy limits.
Depending on the medical expenses and who paid them, we work to negotiate outstanding medical expenses. If our client's auto carrier or health plan paid medical expenses, we look to get a waiver or reduction of any claims for reimbursement medical benefits provided.
Any motorist in Oregon also has uninsured/underinsured motorist coverage. This adds a layer of protection if you are injured by someone with no insurance, or not insurance to cover all of your losses.
If you are struggling with questions about your claim, or if you want to know if you should raise your policy limits, contact us, or check out our free consumer guides. We help people with these issues every day.